Act quickly to save a valuable pension perk

PENSION savers can hang on to an important tax perk and preserve their £40,000 annual allowance after the new freedoms come into effect — but they must act quickly.

On April 6, the total sum that can be put into a pension each tax year and receive tax relief will fall from £40,000 to £10,000 as soon as the saver withdraws cash from their pot for the first time. Anyone contributing more than the annual allowance faces a tax charge of 55% on any excess.

Just five weeks from now, savers aged 55 and over will be able to take money from their pensions flexibly.

Savers can protect the £40,000 limit if they move their pots into drawdown and take some cash out now, before…

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